what type of account is accumulated depreciation

Accumulated depreciation is a contra asset account that reflects the total depreciation expense of a company’s fixed assets over time. Unlike regular asset accounts, which show the original cost of an asset, accumulated depreciation tracks the amount of the asset’s value that has been depreciated. It is paired with the asset’s original cost to determine the asset's current book value. Accumulated depreciation is important for financial reporting, as it helps businesses accurately reflect the wear and tear of their assets on their balance sheet. By properly managing accumulated depreciation, companies ensure accurate tax reporting and maintain a clear understanding of the remaining value of their assets